CUSTODY AGREEMENT
This Custody Agreement is dated May 1, 1996 between XXXXXX XXXXXXX
TRUST COMPANY, a New York State chartered trust company (the "Custodian"), and
XXXXXXXX PORTFOLIOS, INC., a Maryland corporation (the "Client").
1. Appointment and Acceptance; Accounts. (a) The Client hereby
appoints the Custodian as a custodian of Property (as defined below) owned or
under the control of the Client that are delivered to the Custodian, or any
Subcustodian as appointed below, from time to time to be held in custody for the
benefit of the Client.
(b) The Client shall deliver to the Custodian each document and other
item listed in Appendix 1. In addition, the Client shall deliver to the
Custodian any additional documents or items as the Custodian may reasonably
request for the performance of its duties under this Agreement.
(c) The Client instructs the Custodian to establish on the books and
records of the Custodian the accounts listed in Appendix 2 (the "Accounts") in
the name of the Client. Upon receipt of Authorized Instructions (as defined
below) and appropriate documentation, the Custodian shall open additional
Accounts for the Client. Upon the Custodian's confirmation to the Client of the
opening of such additional Accounts, or of the closing of Accounts, Appendix 2
shall be deemed automatically amended or supplemented accordingly. The Custodian
shall record in the Accounts and shall have general responsibility for the
safekeeping of all securities ("Securities"), cash, cash equivalents and other
property (all such Securities, cash, cash equivalents and other property being
collectively the "Property") of the Client that are delivered to the Custodian
for custody.
(d) The procedures the Custodian and the Client will use in
performing activities in connection with this Agreement are set forth in a
client services guide provided to the Client by the Custodian, as such guide may
be amended from time to time by the Custodian by written notice to the Client
(the "Client Services Guide").
2. Subcustodians. The Property may be held in custody and deposit
accounts that have been established by the Custodian with one or more (i)
domestic banks qualified under the Investment Company Act of 1940, as amended
(the "Act") to act as custodian or (ii) foreign banks or other institutions that
are "Eligible Foreign Custodians" (as defined in Rule 17f-5 of the Act) as
listed on Exhibit A (the "Subcustodians"), as such Exhibit may be amended from
time to time by written notice from the Custodian to the Client, or (iii)
through the facilities of one or more securities depositories or clearing
agencies permitted by Rule 17f-4 of the Act; provided however, that the
Custodian shall provide written notice of any proposed amendment to Exhibit A at
least ninety (90) days prior to the proposed effective date of such amendment to
Exhibit A. Unless notified in writing to the contrary by the Client during the
ninety (90) day notice period,
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the Custodian shall assume that the Client has obtained all necessary approval
of any new Subcustodian and the proposed amendment shall become effective as of
the proposed effective date. The Custodian shall hold Property through a
Subcustodian, securities depository or clearing agency only if (a) such
Subcustodian and any securities depository or clearing agency in which such
Subcustodian or the Custodian holds Property, or any of their creditors, may not
assert any right, charge, security interest, lien, encumbrance or other claim of
any kind to such Property except a claim of payment for its safe custody or
administration and (b) beneficial ownership of such Property may be freely
transferred without the payment of money or value other than for safe custody or
administration. Any Subcustodian may hold Property in a securities depository
and may utilize a clearing agency.
3. Records. With respect to Property held by a Subcustodian:
(a) The Custodian may hold Property for all of its
customers with a Subcustodian in a single account identified as
belonging to the Custodian for the benefit of its customers;
(b) The Custodian shall identify on its books as belonging
to the Client any Property held by a Subcustodian for the Custodian's
account;
(c) The Custodian shall require that Property held by the
Subcustodian for the Custodian's account be identified on the
Subcustodian's books as separate from any other property held by the
Subcustodian other than property of the Custodian's customers held
solely for the benefit of customers of the Custodian; and
(d) In the event the Subcustodian holds Property in a
securities depository or clearing agency, such Subcustodian shall be
required by its agreement with the Custodian to identify on its books
such Property as being held for the account of the Custodian as
custodian for its customers or in such other manner as is required by
local law or market practice.
4. Access to Records. The Custodian shall allow the Client's
accountants reasonable access to the Custodian's records relating to the
Property held by the Custodian as such accountants may reasonably require in
connection with their examination of the Client's affairs and/or confirmation of
the contents of these records. The Custodian shall also obtain from any
Subcustodian (and shall require each Subcustodian to use reasonable efforts to
obtain from any securities depository or clearing agency in which it deposits
Property) an undertaking, to the extent consistent with the laws and regulations
of the jurisdiction or jurisdictions to which such Subcustodian, securities
depository or clearing agency is subject, to permit independent public
accountants such reasonable access to the records of such Subcustodian,
securities depository or clearing agency or confirmation of the contents of
these records as may be reasonably required in connection with the examination
of the Client's affairs or to take such other action as the Custodian in its
judgment may deem sufficient to ensure such reasonable access.
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5. Reports. The Custodian shall provide such reports and other
information to the Client and to such persons as the Client directs as the
Custodian and the Client may agree from time to time including but not limited
to an identification of entities having possession of Property of the Client and
notification of any transfer to or from each account maintained by a foreign
Subcustodian for the Custodian on behalf of the Client.
6. Payment of Monies. The Custodian shall make, or cause any
Subcustodian to make, payments from monies being held in the Accounts only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
The Custodian may act as the Client's agent or act as a principal in
foreign exchange transactions at such rates as are agreed from time to time
between the Client and the Custodian.
7. Transfer of Securities. The Custodian shall make, or cause any
Subcustodian to make, transfers, exchanges or deliveries of Securities only in
accordance with Authorized Instructions or as provided in Sections 9, 13 and 17.
8. Corporate Action. (a) The Custodian shall notify the Client of
details of all corporate actions affecting the Client's Securities promptly upon
its receipt of such information.
(b) The Custodian shall take, or cause any Subcustodian to
take, such corporate action only in accordance with Authorized
Instructions or as provided in this Section 8 or Section 9.
(c) In the event the Client does not provide timely
Authorized Instructions to the Custodian, the Custodian shall act in
accordance with the default option provided by local market practice
and/or the issuer of the Securities.
(d) Fractional shares resulting from corporate action
activity shall be treated in accordance with local market practices.
9. General Authority. In the absence of Authorized Instructions to
the contrary, the Custodian may, and may authorize any Subcustodian to:
(a) make payments to itself or others for reasonable
expenses of handling Property or other similar items relating to its
duties under this Agreement, provided that all such payments shall be
accounted for to the Client;
(b) receive and collect all income and principal with
respect to Securities and to credit cash receipts to the Accounts;
(c) exchange Securities when the exchange is purely
ministerial (including, without limitation, the exchange of interim
receipts or temporary securities for securities
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in definitive form and the exchange of warrants, or other documents
of entitlement to securities, for the securities themselves);
(d) surrender Securities at maturity or when called for
redemption upon receiving payment therefor;
(e) execute in the Client's name such ownership and
other certificates as may be required to obtain the payment of income
from Securities;
(f) pay or cause to be paid, from the Accounts, any and
all taxes and levies in the nature of taxes imposed on Property by
any governmental authority in connection with custody of and
transactions in such Property;
(g) endorse for collection, in the name of the Client,
checks, drafts and other negotiable instruments;
(h) take non-discretionary action on mandatory corporate
actions; and
(i) in general, attend to all nondiscretionary details in
connection with the custody, sale, purchase, transfer and other
dealings with the Property.
10. Authorized Instructions; Authorized Persons. (a) Except as
otherwise provided in Sections 6 through 9, 13 and 17, all payments of monies,
all transfers, exchanges or deliveries of Property and all responses to
corporate actions shall be made or taken only upon receipt by the Custodian of
Authorized Instructions; provided that such Authorized Instructions are timely
received by the Custodian. "Authorized Instructions" of the Client means
instructions from an Authorized Person received by telecopy, tested telex,
electronic link or other electronic means or by such other means as may be
agreed in writing between the Client and the Custodian.
(b) "Authorized Person" means each of the persons or entities
identified on Appendix 3 as amended from time to time by written notice from the
Client to the Custodian. The Client represents and warrants to the Custodian
that each Authorized Person listed in Appendix 3, as amended from time to time,
is authorized to issue Authorized Instructions on behalf of the Client. Prior to
the delivery of the Property to the Custodian, the Custodian shall provide a
list of designated system user ID numbers and passwords that the Client shall be
responsible for assigning to Authorized Persons. The Custodian shall assume that
an electronic transmission received and identified by a system user ID number
and password was sent by an Authorized Person. The Custodian agrees to provide
additional designated system user ID numbers and passwords as needed by the
Client. The Client authorizes the Custodian to issue new system user ID numbers
upon the request of a previously existing Authorized Person. Upon the issuance
of additional system user ID numbers by the Custodian to the Client, Appendix 3
shall be deemed automatically amended accordingly. The Client authorizes the
Custodian to receive, act and rely upon any Authorized Instructions received by
the Custodian which have been issued, or purport to have been issued, by an
Authorized Person.
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(c) Any Authorized Person may cancel/correct or otherwise amend any
Authorized Instruction received by the Custodian, but the Client agrees to
indemnify the Custodian for any liability, loss or expense incurred by the
Custodian and its Subcustodians as a result of their having relied upon or acted
on any prior Authorized Instruction. An amendment or cancellation of an
Authorized Instruction to deliver or receive any security or funds in connection
with a trade will not be processed once the trade has settled.
11. Registration of Securities. (a) In the absence of Authorized
Instructions to the contrary, Securities which must be held in registered form
shall be registered in the name of the Custodian or the Custodian's nominee or,
in the case of Securities in the custody of an entity other than the Custodian,
in the name of the Custodian, its Subcustodian or any such entity's nominee. The
Custodian may, without notice to the Client, cause any Securities to be
registered or re-registered in the name of the Client.
(b) Where the Custodian has been instructed by the Client to hold any
Securities in the name of any person or entity other than the Custodian, its
Subcustodian or any such entity's nominee, the Custodian shall not be
responsible for any failure to collect such dividends or other income or
participate in any such corporate action with respect to such Securities.
12. Deposit Accounts. All cash received by the Custodian for the
Accounts shall be held by the Custodian as a short-term credit balance in favor
of the Client and, if the Custodian and the Client have agreed in writing in
advance that such credit balances shall bear interest, the Client shall earn
interest at the rates and times as agreed between the Custodian and the Client.
The Client acknowledges that any such credit balances shall not be accompanied
by the benefit of any governmental insurance.
13. Short-term Credit Extensions. (a) From time to time, the
Custodian may extend or arrange short-term credit for the Client which is (i)
necessary in connection with payment and clearance of securities and foreign
exchange transactions or (ii) pursuant to an agreed schedule, as and if set
forth in the Client Services Guide, of credits for dividends and interest
payments on Securities. All such extensions of credit shall be repayable by the
Client on demand.
(b) The Custodian shall be entitled to charge the Client interest for
any such credit extension at rates to be agreed upon from time to time or, if
such credit is arranged by the Custodian with a third party on behalf of the
Client, the Client shall reimburse the Custodian for any interest charge. In
addition to any other remedies available, the Custodian shall be entitled to a
right of set-off against the Property to satisfy the repayment of such credit
extensions and the payment of, or reimbursement for, accrued interest thereon.
14. Representations. (a) The Client represents that (i) the
execution, delivery and performance of this Agreement (including, without
limitation, the ability to obtain the short-term extensions of credit in
accordance with Section 13) are within the Client's power and authority and have
been duly authorized by all requisite action (corporate or otherwise) of the
Client and of the beneficial owner of the Property, if other than the Client,
and (ii) this Agreement and each
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extension of short-term credit extended to or arranged for the benefit of the
Client in accordance with Section 13 shall at all times constitute a legal,
valid and binding obligation of the Client enforceable against the Client in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law).
(b) The Custodian represents that (i) the execution, delivery and
performance of this Agreement are within the Custodian's power and authority and
have been duly authorized by all requisite action (corporate or otherwise) of
the Custodian and (ii) this Agreement constitutes the legal, valid and binding
obligation of the Custodian enforceable against the Custodian in accordance with
its terms, except as may be limited by bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights in general and subject to
the effect of general principles of equity (regardless of whether considered in
a proceeding in equity or at law).
15. Standard of Care; Indemnification. (a) The Custodian shall be
responsible for the performance of only such duties as are set forth in this
Agreement, the Client Services Guide or contained in Authorized Instructions
given to the Custodian which are not contrary to the provisions of any relevant
law or regulation. The Custodian shall be liable to the Client for any loss,
liability or expense incurred by the Client in connection with this Agreement to
the extent that any such loss, liability or expense results from the negligence
or willful misconduct of the Custodian or any Subcustodian.
(b) The Client acknowledges that the Property may be physically held
outside the United States. The Custodian shall not be liable for any loss,
liability or expense resulting from events beyond the reasonable control of the
Custodian, including, but not limited to, force majeure. Except as provided in
the previous sentence, the liability of the Custodian for losses incurred by the
Client in respect of Property shall not be affected by the Custodian's use of
Subcustodians.
(c) In addition, the Client shall indemnify the Custodian and
Subcustodians and any nominee for, and hold each of them harmless from, any
liability, loss or expense (including attorneys' fees and disbursements)
incurred (i) as a result of the Custodian having acted or relied upon any
Authorized Instructions or otherwise acted in accordance with the terms of this
Agreement or (ii) arising out of any such person acting as a nominee or holder
of record of Securities; provided, however, that this indemnity shall not cover
any liability, loss or expense incurred by the Custodian or any Subcustodian
which directly results from the negligence or willful misconduct of the
Custodian or such Subcustodian. The Custodian shall notify the Client promptly
upon becoming aware of any matters which may result in liability, loss or
expense to the Client as provided for in this Agreement. The Client shall be
responsible to promptly instruct the Custodian as to how to pursue the
resolution of any such matters on its behalf.
16. Fees; Liens. The Client shall pay to the Custodian from time to
time such compensation for its services pursuant to this Agreement as may be
mutually agreed upon as well as the Custodian's reasonable out-of-pocket and
incidental expenses. The Client shall hold the
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Custodian harmless from any liability or loss resulting from any taxes or other
governmental charges, and any expenses related thereto, which may be imposed or
assessed with respect to the Accounts or any Property held therein. The
Custodian is, and any Subcustodians are, authorized to charge the Accounts for
such items and the Custodian shall have a lien, charge and security interest on
any and all Property for any amount owing to the Custodian from time to time
under this Agreement.
17. Termination. This Agreement may be terminated by the Client or
the Custodian by 60 days written notice to the other, sent by registered mail.
If notice of termination is given, the Client shall, within 30 days following
the giving of such notice, deliver to the Custodian a statement in writing
specifying the successor custodian or other person to whom the Custodian shall
transfer the Property. In either event, the Custodian, subject to the
satisfaction of any lien it may have, shall transfer the Property to the person
so specified. If the Custodian does not receive such statement the Custodian, at
its election, may transfer the Property to a bank or trust company established
under the laws of the United States or any state thereof to be held and disposed
of pursuant to the provisions of this Agreement or may continue to hold the
Property until such a statement is delivered to the Custodian. In such event the
Custodian shall be entitled to fair compensation for its services during such
period as the Custodian remains in possession of any Property and the provisions
of this Agreement relating to the duties and obligations of the Custodian shall
remain in full force and effect; provided, however, that the Custodian shall
have no obligation to settle any transactions in Securities for the Accounts.
The provisions of Sections 15 and 16 shall survive termination of this
Agreement.
18. Investment Advice. The Custodian shall not supervise, recommend
or advise the Client relative to the investment, purchase, sale, retention or
other disposition of any Property held under this Agreement.
19. Confidentiality. The Custodian, its agents and employees shall
maintain the confidentiality of information concerning the Property held in the
Client's account, including in dealings with affiliates of the Custodian. In the
event the Custodian or any Subcustodian is requested or required to disclose any
confidential information concerning the Property, the Custodian shall, to the
extent legally permissible, promptly notify the Client of such request or
requirement so that the Client may seek a protective order or waive any
objection to the Custodian's or such Subcustodian's compliance with this Section
19. In the absence of such a waiver, if the Custodian or such Subcustodian is
compelled, in the opinion of its counsel, to disclose any confidential
information, the Custodian or such Subcustodian may disclose such information to
such persons as, in the opinion of counsel, is so required.
20. Notices. Any notice or other communication from the Client to the
Custodian, unless otherwise provided by this Agreement or the Client Services
Guide, shall be sent by certified or registered mail to Xxxxxx Xxxxxxx Trust
Company, Xxx Xxxxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx, 00000, Attention: President,
and any notice from the Custodian to the Client is to be mailed postage prepaid,
addressed to the Client at the address appearing below (Attention: Treasurer),
or as it may hereafter be changed on the Custodian's records in accordance with
written notice from the Client.
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21. Assignment. This contract may not be assigned by either party
without the prior written approval of the other.
22. Miscellaneous. (a) This Agreement shall bind the successors and
assigns of the Client and the Custodian.
(b) This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York without regard to its conflicts
of law rules and to the extent not preempted by federal law. The Custodian and
the Client hereby irrevocably submit to the exclusive jurisdiction of any New
York State court or any United States District Court located in the State of New
York in any action or proceeding arising out of this Agreement and hereby
irrevocably waive any objection to the venue of any such action or proceeding
brought in any such court or any defense of an inconvenient forum.
In witness whereof, the parties hereto have set their hands as of the
date first above written.
XXXXXXXX PORTFOLIOS, INC.
By______________________
Name:
Title:
Address for record: 000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Accepted:
XXXXXX XXXXXXX TRUST COMPANY
By___________________________
Authorized Signature
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APPENDIX 1
Account Documentation
REQUIRED DOCUMENTATION FOR CORE CUSTODIAL SERVICES (INCLUDING TAX RECLAIMS):
CUSTODY AGREEMENT
CLIENT SERVICES GUIDE (INCLUDING APPENDICES)
FEE SCHEDULE / BILLING GUIDE
GENERAL ACCOUNT INFORMATION
US TAX AUTHORITY DOCUMENTATION
LOCAL TAX OFFICE LETTER / APPLICATION LETTER
(NON-UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FORM 6166 / REQUEST FOR FOREIGN CERTIFICATION FORM
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
CERTIFICATION OF BENEFICIAL OWNERSHIP, LEGAL NAME, LEGAL RESIDENCY, TAX STATUS
AND TAX IDS
TAX RECLAIM POWER OF ATTORNEY
PREVIOUS TAX RECLAIM FILING INFORMATION
(PREVIOUS FILERS, ONLY)
UK TAX AUTHORITY DOCUMENTATION
SOPHISTICATED INVESTOR (ACCREDITED INVESTOR) LETTER
(UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
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DOCUMENTATION THAT IS REQUIRED FROM AN ENTITY CLASSIFIED AS TAX-EXEMPT
BY ITS LOCAL TAX AUTHORITY:
UK FORM 4338
(EXEMPT NON-UNITED KINGDOM-RESIDENT BENEFICIAL OWNERS, ONLY)
UK FORM 309A
(EXEMPT UNITED STATES-RESIDENT BENEFICIAL OWNERS, ONLY)
FOREIGN EXEMPTION LETTERS / APPLICATION FOR AUSTRALIAN EXEMPTION LETTER
(EXEMPT BENEFICIAL OWNERS, ONLY)
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL USE THE PROXY VOTING SERVICE:
VOTING POWER OF ATTORNEY
DOCUMENTATION THAT IS REQUIRED ONLY IF YOU WILL DEAL IN CERTAIN SECURITIES:
JGB INDEMNIFICATION LETTER
KOREAN SECURITIES POWER OF ATTORNEY
NEW ZEALAND 'APPROVED ISSUER LEVY' LETTER
SPANISH POWER OF ATTORNEY WITH APOSTILE
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APPENDIX 2
Client Accounts
Account Name Account Number Account Mnemonic
------------ -------------- ----------------
1. Xxxxxxxx Xxxxxxxxx 000402644 HSIF
International Fund
2. Xxxxxxxx Xxxxxxxxx Global 000402685 HGEC
Smaller Companies
Fund -- Foreign
3. Xxxxxxxx Xxxxxxxxx Global 000402693 HSEC
Smaller Companies
Fund - Domestic
4. Xxxxxxxx Xxxxxxxxx Global 000403048 HHGT
Technology Fund -- Foreign
5. Xxxxxxxx Xxxxxxxxx Global 000403055 HSGT
Technology Fund -- Domestic
6. Xxxxxxxx Henderon Global ? ?
Growth Opportunities
Fund -- Foreign
7. Xxxxxxxx Xxxxxxxxx Global ? ?
Growth Opportunities
Fund -- Domestic
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APPENDIX 3
Part I - Authorized Signatures
The Custodian is directed to accept and act upon Authorized Instructions
received from any of the following persons or entities:
Telephone/ Authorized
Name Organization Title Fax Signature
---- ------------ ----- --- ---------
Authorized by: ___________________________
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Part II - System User ID numbers
The Custodian is directed to accept and act upon Authorized Instructions
transmitted electronically and identified with the following mnemonics and
system user ID numbers for the following activities:
Work Station Account Workstation Sessions
User I.D. Mnemonic Number TE TCC SL FE CM MA TD
--------- -------- ------ -- --- -- -- -- -- --
Workstation Session Codes
TE Trade Entry
TCC Trade Cancel/Correct
SL Securities Lending
FE Foreign Exchange
CM Cash Movement
MA Mass Authorization
TD Time Deposit
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EXHIBIT A
Subcustodians
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